Best of 2012: Elie Khouri, OMG interview

Ten years ago Elie Khouri ditched a glamorous job in the advertising industry to set up the media agency OMD. His friends thought he was crazy. A decade later, with 450 staff and over $2bn a year in billings, he has good reason to celebrate
Best of 2012: Elie Khouri, OMG interview
The year 2012 has been the best ever year in the history of the group, and next year is promising to be even better, says OMD boss Elie Khouri.
By Anil Bhoyrul
Sun 09 Dec 2012 08:42 AM

Elie Khouri leaves the best to last. It is close to 11pm at the Armani Pavilion in Dubai, where 600 VIP guests have been enjoying a lavish party to celebrate ten years since he first created the media star OMD, part of the global giant Omnicom Media Group.

Everyone has had a good time; everyone is getting ready to leave. Suddenly, Khouri — standing on stage — begins to list the names of the nineteen individuals who helped him form the company in 2002 and are still employed by the group.

“We are going on a trip together that will mark our journey together…a ten-day expedition in the heart of Peru’s rainforest!” he announces.

The trip in March promises to be the mother of all corporate team bonding and motivating exercises, but it would be foolish to expect anything less from Khouri. He likes to do things big, and he does big pretty well. We meet again five days after the event in Khouri’s office, where the party host has metamorphosed back into the corporate animal that has turned OMD into a company that just can’t stop growing. Sharp suited, quick witted and single minded, he reels off the numbers that have shaped a decade. And they are impressive numbers: seventeen staff to 450; two offices to eight, across six countries; billings having grown tenfold with an average compounded annual growth rate of 24 percent.

Oh, and for good measure, this is a man who is not afraid to call the recovery.

“Recession? Really?” He looks bemused at the suggestion. “The recession is over, it is over, and it is over big time. 2012 has been the best ever year in the history of the group, and next year is promising to be even better. We are looking at ten-fifteen percent growth, with the industry looking at seven percent. If you compare to our peak before, in 2008, we are up 20 percent against that figure. Oh yes, the recession is history,” he says.

It certainly is from where the CEO of Omnicom Media Group (MENA) is sitting. According to monitoring sources, billings this year for his media planning and buying agencies OMD, PHD and M2M have topped the $2.7bn mark for the first time. It helps to have an A-list of blue chip clients including PepsiCo, du, Henkel, Visa, Beiersdorf, Mercedes-Benz, Dubai Properties Group and Jumeirah — not to mention some healthy new business won this year, such as McDonald’s, HTC, SABIC, ICT, AAC, Global Village, Qnbn, Waterfront and IKEA.

“This is fun. To get here, you have to be single minded, consistent, and focus on people. And invest in people. Once you do this, everything will follow. I call it ‘PPP’ — people, product and profits. Unfortunately many people do it the other way round, they start with profits,” he says.

It certainly is fun right now to be at the core of an industry that seems to have got back on its feet after hitting rock bottom in 2009. Digital advertising now accounts for just 4.5 percent of the total industry spend in the region of around $4.5bn a year, but that number is expected to reach 10 percent by 2015, a figure closer to the global average. Khouri has been banging the digital drum for several years, and though he admits the rivals are now catching up, he doesn’t sound too worried.

“By the time they wake up we will be doing other things. The other thing now is pretty much mobile. For the last five years, every year we have been saying ‘this is the year of the mobile’, but now we are starting to see the momentum because the technology and speed is available — so is software development. We are trying to leverage that for clients. I won’t say we have cracked mobile, but we are cracking it,” he says.

Cracking it would be smart: mobile advertising in the region is worth barely $20m right now, but estimated to grow by more than 100 percent next year — and at that rate for several years after. And although print advertising is falling by around 5-7 percent a year, television advertising has found a second life, growing by 15 percent a year. “The television stations are investing in content, and so clients are putting more money behind it — we have seen a phenomenal increase in content and that means for expenditure in advertising, simple as that,” he says.

But while Khouri has been focused during the past few years on the digital arena, he is already looking to the next “big thing”, and has no hesitation declaring what that will be.

“It’s about data. Data, data, data,” he says, adding: “What do you do with data, how do you translate data into something that will give you a meaningful insight and knowledge about your business, so that you can take decisions that will move your business forward? The problem in this region is the lack and scarcity of data. How we, as leaders of the industry, try to aggregate all the data and come up with meaningful findings, this is the challenge for us.”

Khouri’s agency is investing a huge amount of time and money to closely study and analyse the information from a multitude of sources, including consumer insights, market data, brand data, social media data, digital data and TV viewing data. If OMD can crack that code, it hopes that clients could far more efficiently target the most profitable kind of consumer for each brand.

“If you are selling breakfast in a restaurant off a highway, the data can tell you who is driving between Abu Dhabi and Dubai at 6am and probably didn’t have breakfast. Data is knowledge and knowledge is results. Those who do it faster and better will progress,” he says.

Doing it faster and better is something Khouri has specialised in during his 27-year career in the media industry. Born in Beirut in 1964, his family didn’t have enough money to leave when war broke out in 1975. Khouri’s teenage years were spent dodging the bullets, and also learning his entrepreneurial skills that still come in handy today.

He says: “I used to sell anything I could get my hands on — clothing, firecrackers, drinks cans. Anything. I liked being involved in the concept of trading and translating something into a profitable business. At that age I didn’t know what I wanted to do, I initially thought finance — I actually started in finance but it was boring and static.”

Then came the move to advertising after a friend “got him excited” about the industry. When just 24 years old, Khouri landed a job with advertising agency BBDO (also part of Omnicom Group) in Cyprus.

Thanks to clients such as Pepsi and Yves Saint Laurent, the young upstart found himself globetrotting to shoot television commercials, before moving to Dubai in 1992 to work for Impact BBDO. Four year later came another stint in Beirut, this time as managing director of Impact BBDO. In 2002, he came back to Dubai to set up his own show OMD, by effectively unbundling three existing media departments within Omnicom’s full-service agencies.

He explains: “I wanted to create something that didn’t exist and make it a success. I was driven by the challenge. Media used to be number crunching at the last five minutes of a presentation, and putting spots on an excel sheet. Today media is at the core of communication planning and at the forefront when it comes to development of technology.

“This decade, we have seen the transformation of media. Back in 2002, I could see that media was going to take over in terms of development, so I decided to be there while it is happening and reap the results for Omnicom.”

The move was somewhat surprising, given that Khouri had already established himself at the heart of a creative and glamorous industry. He had exactly the kind of job all his pals wanted, but was prepared to ditch it all and risk it all — for something that on the face of it, at the time, appeared rather bland. “What I was doing was exciting but I am hardcore results oriented. In advertising, it’s very subjective, artistic and creative. I like to link what I do with results. Media is delivery, it is tangible, and you can measure it.”

He adds: “It was a big decision. I was a successful advertising man and I had a big career ahead of me but took the decision to leave. At the time people thought I was taking a big risk. A lot of people said, ‘what’s wrong with you’? Advertising is far more glamorous, you go on shoots, you go to Hollywood, and you meet clients. Media was seen as a boring business in terms of buying and planning, and it was reserved for the geeks.”

Against all advice, Khouri persevered with setting up OMD, and in Dubai, quickly found himself up against more established players such as Mindshare and Starcom. He admits there were “some frictions” amongst his initial team, and his rivals “were keen to see the back of us”.

But the numbers soon changed that, with growth figures of 30 percent each year in the early years of operation. By 2005, OMD was in pole position to take full advantage of the Dubai property boom, and despite having to shed some staff after the financial crash in 2008, has managed to maintain steady average growth in the last decade.

Looking back, he says the most important ingredients have been hiring the right people. “Spotting and placing the right talent, that’s what it’s all about. You can get good talent but placing them in the right place is the challenge. You have to know when to hire but also sometimes when to fire, Firing is unpleasant but sometimes unavoidable; it’s not what you go in business for.”

So what next for Khouri? Still just 48 years old, he says he is focused on pushing new boundaries and leading the agency into new areas of the business — and of course, the small matter of an expedition in the Amazon to organise for his nineteen most loyal staff.

After that, job done? “Oh no!” he says. “There is still a lot to do. Eventually someone will take my place, but I have another decade in me. At least.”

A Decade To Remember — Ten milestones that shaped the region’s media

*MBC Group appoints the Choueiri Group and grows to ten channels in ten years

*Rotana grows with the merger with LBC and News Corp’s rising stake

*CNN, BBC World and Sky News begin operations in the region

*Digital heavyweights including Facebook, Google and LinkedIn open regional offices

*Yahoo! takes over Maktoob

*Media free zones mushroom in the region

*JCDecaux starts its regional presence with a partnership in Qatar

*Sixteen new channels appear in Egypt after the revolution

*Print circulation audits begin, with more than 100 titles now audited

*The telecommunications sector opens up to competition

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